Reader Question: Can I transfer rental income to my wife to save tax?

1 min Read Published: 19 Jun 2012

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Reader Question:

I have unsuccessfully been trying to sell my house for over two years now. Dispite reducing the asking price by £20,000 it remains unsold. I am now thinking of buying another house, & renting my unsold property out.

Although I am married, the house is in my mame. I am a higer rate tax payer.

So my question is this:

Could I transfer my house to my wife, who is a lower rate tax payer, & if so would this mean that she would only have to pay the lower rate of tax from any financial gain in respect of the rental income?


My response:

Yes you could transfer the property into your wife's name so that any rental income is assessed against her income for tax purposes, so lowering your potential tax bill. Plus as you are husband and wife there is now capital gains tax or inheritance tax to pay upon transfer.

But interestingly it is theoretically possible to transfer as little as 1% of the property into a spouse's name and still mitigate income tax. Under a quirk of tax legislation the income can still be split 50-50 for tax purposes between a husband and wife, so potentially reducing the original owner's tax bill without giving up full control of the asset. Obviously in the event of selling the property the majority owner would receive most of the proceeds and so have a higher potential capital gains tax bill than their spouse.

But this is a complex area and I adivse you to employ the services of a tax accountant and solicitor to advise you before you do anything.

I hope that helps

Best Wishes




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  1. Interesting point that may not have occurred to some of investor Landlords.

  2. Just a quick note to thank you for answering
    my question regarding the tax implications of
    transfering my property into my wife’s name.

    I found your response both helpful & very

    Thanks again
    Ian from Manchester

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